shareholders’ report interim report as at 30/09/2016...6 btv interim report as of 30/09/2016 total...

1BTV inTerim reporT AS oF 30/09/2016

ShareholderS’ reportinterim report aS at 30/09/2016

BanK FÜr tirol Und VorarlBerG aG

2 BtV interim report aS oF 30/09/2016

diary dates for BtV shareholders in 2016 ................................................................................................................................. 02

the BtV Group at a glance ............................................................................................................................................................. 03

management report and notes on BtV Group business trends

economic environment and BtV shares .................................................................................................................................... 04

Business trends ................................................................................................................................................................................. 06

abridged consolidated financial statements

Balance sheet ..................................................................................................................................................................................... 08

Comprehensive income statement ............................................................................................................................................. 09

Key indicators .................................................................................................................................................................................... 10

Statement of change in equity ...................................................................................................................................................... 11

Cash flow statement ....................................................................................................................................................................... 12

BtV Group: notes ............................................................................................................................................................................ 13

accounting and valuation principles ...............................................................................................................................................13

main business events in the period reported .......................................................................................................................... 16

events after the interim financial statement date .................................................................................................................. 16

Balance sheet – assets ................................................................................................................................................................... 17

Balance sheet – liabilities ............................................................................................................................................................... 19

Comprehensive income statement notes ................................................................................................................................ 23

other notes ....................................................................................................................................................................................... 26

Segment reporting .......................................................................................................................................................................... 31

Statements by the statutory representatives .......................................................................................................................... 35

overview of 3 Banken Group ....................................................................................................................................................... 36

imprint ................................................................................................................................................................................................ 37

Contents

important dateS For BtV ShareholderS

annual General meeting 11/05/2016, 10 am, Stadtforum, innsbruck the dividend will be published on the BtV homepage and in the gazette

of the Wiener Zeitung the day after the annual General meeting.ex-dividend date 18/05/2016payment of dividend 20/05/2016interim report as at 31/03/2016 published on 20/05/2016 (www.btv.at)half-year Financial report to 30/06/2016 published on 26/08/2016 (www.btv.at)interim report as at 30/09/2016 published on 25/11/2016 (www.btv.at)


the BtV Group at a glance

earninGS in eUr million

30/09/2016 30/09/2015* % change

net interest income 108.6 128.9 –15.7 %loan-loss provisions in the credit business –12.9 –9.5 +36.2 %net commission income 35.3 37.9 –6.9 %operating expenses –131.9 –124.9 +5.6 %Other operating profit 69.9 58.9 +18.7 %Net pre-tax profit for the period 72.6 172.1 –57.8 %Group profit for the period 59.9 150.0 –60.0 %

BalanCe Sheet in eUr million

30/09/2016 31/12/2015 % change

total assets 9,846 9,426 +4.4 %loans and advances to clients after loan loss provisions 6,589 6,360 +3.6 %primary funds 7,167 7,021 +2.1 %

of which savings deposits 1,243 1,201 +3.5 %of which securitised debt including subordinated capital 1,496 1,378 +8.6 %

equity 1,211 1,149 +5.4 %managed deposits 13,108 12,732 +2.9 %

reGUlatory Capital (Crr) in eUr million

30/09/2016 31/12/2015 % change

risk-weighted assets 6,547 6,263 +4.5 %equity 953 978 –2.5 %

of which common equity (Cet1) 921 951 –3.1 %of which total core capital (Cet1 and at1) 921 951 –3.1 %

Common equity tier 1 ratio 14.07 % 15.18 % –1.11 ppCore capital ratio 14.07 % 15.18 % –1.11 ppequity ratio 14.56 % 15.61 % –1.05 pp

Company Key FiGUreS in percentage points

30/09/2016 31/12/2015 Change in percentage

points

return on equity before tax (roe) 8.22 % 15.88 % –7.66 ppreturn on equity after tax 6.79 % 12.77 % –5.98 ppCost/income ratio 60.7 % 58.6 % +2.1 pprisk/earnings ratio 11.9 % 9.7 % +2.2 pp

reSoUrCeS number

30/09/2016 31/12/2015 Change figure

Weighted average number of employees 1,424 1,354 +70number of branches 36 36 +0

Key indiCatorS For BtV ShareS 30/09/2016 30/09/2015*

number of ordinary no par value shares 25,000,000 22,500,000number of preference shares 2,500,000 2,500,000top price of ordinary/preference share in eUr 21.30/20.00 22.40/21.00Bottom price of ordinary/preference share in eUr 20.70/19.00 21.20/18.10Closing price of ordinary/preference share in eUr 20.80/19.20 21.20/20.00market capitalisation in millions of euros 568 527iFrS epS in eUr 2.71 7.76p/e ratio, ordinary share 7.7 2.7p/e ratio, preference share 7.1 2.6

* 30/09/2015 adjusted to the change in the scope of consolidation.


management report and notes on BtV Group business trends in 2016

economic environmentBased on the reported economic data, the european economy in the third quarter was unexpectedly robust, despite the Brexit vote in late June. this was reflected in a stable and, in the end, even attractive mood for investors, consumers and companies. despite rising domestic consumption and positive business confidence, consumer prices only rose by 0.2% compared to the previous year. This low inflation was once again influenced by a negative contribution from energy prices. Unemployment in the last few years has constantly fallen, but in the third quarter was unable to show any further fall and is currently at 10.1%. this means that there is still room for improvement.

Inflation in the third quarter also proved more stable in the United States than in the eurozone. the increase in prices across the atlantic, on an annualised basis in July and august, was approximately 1% and in September even reached 1.5%. alongside the approaching inflation target of 2%, the US central bank also looks at the labour market. an unemployment level of 5% and an average hourly wage that is growing faster than inflation are indications of a robust labour market. despite the slightly weaker economic data in the summer, the expectations of market players of a further increase in interest rates this year have again risen.

China’s economy developed surprisingly well in the last quarter. With year-on-year economic growth of +6.7% in the third quarter, China met its growth targets. the growth in industrial production and retail turnover picked up in august, and exceeded analysts’ expectations. the conversion away from industry and towards a service society appears not to be delivering the economic breakdown that many spectators expected. Here an expansive fiscal policy in particular took hold, with the infrastructure projects that were initiated also providing support.

interest ratesin July, investors once again saw new all-time lows in european, US and Japanese bond yields. later during the third quarter rates did, however, show signs of rising. this can be explained by the widely held opinion that the european Central Bank (eCB) and the Bank of Japan (BoJ) had already largely run out of room to manoeuver. in addition, the eCB is under considerable pressure from the US, which is aiming for a higher level of interest rates. the market players in the eurozone would rather see economic growth and inflation at higher levels, and therefore were hoping for further measures from the eCB. these expectations were quashed by eCB president mario draghi in the last quarter. the monthly purchases of eUr 80 billion will indeed be continued until end march 2017, but any extension was left hanging. draghi stressed that this monetary policy could not be implemented forever, and other fiscal measures were necessary.

Currenciesafter a really turbulent second quarter for the currency markets, which were exposed to large swings up and down due to the market jitters caused by Brexit, the third quarter was relatively peaceful throughout for the euro, and also for the US dollar, Swiss franc and Japanese yen. the euro showed some more strength faced with the summertime US economic dip, and the accompanying delays in any raise in key interest rates, and was able to pick up about +1.2%.

against the Swiss franc too, the euro showed a marginal increase of +0.7%. the interventions by the Swiss national Bank to keep the franc weaker against the euro were therefore still having an effect. Barely a month passed without some new record value being reached by the SnB’s currency reserves. By the end of august these had peaked at approximately 640 billion francs, meaning a rise since abandoning the minimum rate of over 100 billion francs.


it was only against the Japanese yen that the euro lost ground, by −0.60%. After the flight to the yen following the Brexit vote, and the related weakening of the euro, the focus shifted once more to the monetary policy decisions of the central banks. the expected easing measures by the Bank of Japan (BoJ), as well as the non-occurrence of additional expansion of monetary policy in the eurozone turned out to be responsible for the brief rise of the euro to 117.73 in July. however, the BoJ fell below market expectations with its decisions to expand quantitative easing, and the yen rose again. the eUr/Jpy exchange rate ended the third quarter at 113.09.

equitiesthe third quarter of this year closed with a positive trend, despite the normally weak summer months of august and September: a majority of the global leading indices were able to recoup their Brexit losses, and at the end of the third quarter were once again at pre-Brexit levels. among the established european share indices, the leading German index, the daX, the Swiss Smi share index and the austrian atX were able to rise above their pre-Brexit levels by the end of September, and so compensate for all their losses following the British referendum. Within europe, the euro Stoxx 50, the italian FtSe miB and the British FtSe 100 all trailed. overall we

saw another quarter with high volatility where the indices were influenced mainly by the price of oil, the US election and the decisions of the important central banks. the daX showed a rise of +8.6% in the third quarter, and the atX showed an impressive increase of +14.8%. the Swiss Smi share index only rose by +0.6%. as it was not hit so hard by the Brexit referendum in the first place, this, the lowest trend within europe, was still enough to cancel out Brexit losses. the italian FtSe miB index, with +1.70%, even did better than that, and the British FtSe 100 also showed an acceptable performance at +2.3%. the euro Stoxx 50 reported an increase of +4.8%. outside europe, the S&p 500 rose by +1.9% and the dow Jones by +0.7%. the Japanese nikkei 225 managed an increase in value of +6.0%.

the ordinary shares in BtV fell over 2016 so far by –2.8% to eUr 20.8. the preference shares, on the other hand, increased by +1.1% and listed at eUr 19.20.

Balance sheet performancethe core operational business at BtV was again successful in the third quarter. Both customer receivables and primary deposits are well above the previous year.

BtV shares as at 30 September 2016


total assets increased compared to the end of 2015 by +4.4%, or eUr +419 million to eUr 9,845 million.

Customer receivables rose in the third quarter by eUr +235 million to eUr 6,792 million. in the corporate client sector, customer receivables increased compared to 31/12/2015 by eUr +224 million, and in the retail customer sector by eUr +14 million.

the volume of loan loss provisions for lending activities, at EUR −203 million, was slightly above the position on 31/12/2015 of EUR −197 million.

Cash reserves grew further. at eUr 327 million, the overall figure was clearly above the previous year by eUr +180 million.

Financial assets continued to hold steady, and at a level of EUR 2,088 million were EUR −33 million below the level at year-end 2015.

the growth in primary funds continued in the third quarter. this meant an overall increase of eUr +146 million compared to 31/12/2015. the ratio of customer loans to primary funds, the loan-deposit ratio, rose slightly because of the greater expansion in customer loans, from 90.6% at the end of 2015 to 91.9%.

Customer funds on deposit, the total of primary deposits and deposit volumes, as of 30/09/2016 stood at eUr 13,108 million which puts them over EUR 13 billion for the first time. Compared to the end of 2015, this represents an increase of +2.9% or eUr +375 million. the volume of deposits climbed much more steeply than in the first half of the year. after a volatile start to the year, in the third quarter substantial growth was achieved overall. this meant that the volume of deposits, at eUr 5,940 million, reached a level which was eUr +229 million higher than at 31/12/2015. liabilities to credit institutions rose by eUr +208 million from the 2015 year-end level, reaching eUr 1,190 million. Balance sheet equity increased by eUr +62 million to eUr 1,211 million.

as at 30 September 2016, the banking group’s qualifying net equity under Crr (Basel iii) was eUr 953.2 million. overall, it fell by eUr –24.7 million, or –2.5%, compared with the 2015 year-end. as at 30 September 2016, the banking group’s common equity (Cet1) under Crr amounted to eUr 921.0 million. this therefore fell by eUr –29.9 million, or –3.1%.

total risk-weighted assets rose by eUr +284.2 million to eUr 6,546.9 million. From this, the core capital ratio is calculated to be 14.07% and the overall equity ratio is 14.56%.

profit trendBoth customer receivables and primary deposits are well above the levels of 31/12/2015. nevertheless, the pre-tax profit for the period fell by eUr –99.5 million, or –57.8%, compared to the previous year. as already announced several times in BTV’s financial reports, it is mainly the decline in interest earnings along with the earnings from financial assets that are affecting the P&L. It must be borne in mind that the reorganisation of the own-account securities in the previous year meant the removal of future interest income, which is of course reflected in the figures for the whole of 2016.

interest earnings after risk provisionsthe „interest earnings excluding at-equity income“ fell compared to 30/09/2015 by EUR −23.7 million or −19.9%. The sale of the hidden reserves led to the loss of future interest income, and this is reflected in the item „interest income excluding at-equity income“. this fell compared to the previous year by EUR −20.2 million or −20.3%. Earnings from companies valued at equity, at eUr 29.5 million are at the same level as the previous year. the loan loss provisions continue to be at a very low level. the EUR −12.9 million that has so far been consumed for credit risks, represents an increase of EUR −3.4 million over 2015.

net commission incomethe main driver for commission earnings is the securities business, which in 2016 cannot compete with the previous year. the news from the stock exchanges has been highly volatile, with heavy drops in prices, especially in the first quarter, and even good news from the exchanges, e.g. record levels of the dow Jones, was not able to turn around this negative momentum. the earnings in the securities business, at eUr 17.0 million are eUr –2.1 million or –11.1% lower than in the same period of 2015.

the second-largest source of earnings in the commissions area, payments processing, is at the same level as last year at eUr 9.2 million. the earnings of eUr 5.0 million from lending represents a fall of eUr 0.3 million compared to the strong performance in 2015. last year, the profit on currency, foreign


exchange and precious metals was rose sharply due to the revaluation of the ChF, and without this exceptional effect, there is a small drop of eUr –0.1 million to eUr 2.9 million year on year. the other service activities at eUr 1.2 million are close to last year’s level (eUr 1.3 million). in total, earnings from commissions, compared to the prior year, which was assisted by stock markets that encouraged investment, were clearly lower at eUr 35.3 million, compared to eUr 37.9 million. the fall in the securities business was partially offset by the favourable trends in lending and the currency, foreign exchange and precious metals business.

trading incomeearnings from trading rose compared to 2015 by eUr +0.3 million to eUr 3.5 million.

operating expensesCompared to the previous year, operating expenses rose in the reporting period by eUr +7.0 million, or +5.6%, to eUr 131.9 million. personnel expenditure showed the largest increase in absolute figures. at eUr 70.7 million, this item exceeds the previous year’s figure by eUr +2.5 million. the collective agreement for banks that has applied since 1 april 2016 increased the salaries of BtV aG employees covered by the collective agreement by +1.24% on average. the comparatively high cost for a bank of operating expenses and depreciation is due to the fully consolidated (cable car) companies mayrhofner Bergbahnen and Silvretta montafon. Both p&l items rose compared to the previous year by eUr +2.0 million to eUr 39.8 million and depreciation by eUr +2.4 million to eUr 21.4 million.

Other operating profitother business earnings increased compared to the previous year by eUr +11.0 million or +18.7%, to eUr 69.9 million. this item is headed up by the two cable railway companies, who accounted for a significant part of the growth.

income from financial assetsat eUr +0.1 million, income from financial assets reached a figure that is eUr –77.5 million below the previous year. as already mentioned, it was the hidden reserves, sold in 2015, that dominated this p&l position, which means that any comparison is meaningless.

tax positionthe amounts recorded under „taxes on income and profit“ include the current cost of Austrian corporation tax, and otherwise relate primarily to the accrual and prepayment provisions for deferred taxes, in accordance with iFrS. as at 30/09/2016, the tax liability was down –42.8% compared to the previous year, at eUr –12.7 million. the effective tax rate was thus 17.5%.

Group incomepre-tax profit for the period fell by eUr –99.5 million, or –57.8%, to eUr 72.6 million. Given the impact of the significantly reduced earnings from financial assets, it is primarily the interest earnings that define the level of earnings for the period. the group profit for the period, at EUR 59.9 million, is EUR −90.0 million lower than in 2015. this reflects a fall of –60.0% and therefore is within the expected range.

owing to the low interest earnings compared to the end of 2015, the cost-income ratio rose from 58.6% to 60.7%. the return on equity before tax, given that 2015 was driven by the extraordinary result from financial assets, fell from 15.9% to 8.2%. the risk/earnings ratio increased on the other hand from 9.7% to 11.9%.

OutlookBtV is continuing its successful growth strategy in the expanding markets of Vienna, Bavaria, Baden-Württemberg, eastern Switzerland, South tyrol and Veneto (out of innsbruck). BtV is already the market leader in the main target groups in tyrol and Vorarlberg. here, this position must continue to be consolidated and further market shares must be gained.For the 2016 business year we expect, as stated in the business forecast report in 2015, provided this is not derailed by any unexpected economic turbulence, that the annual earnings before tax will fall within the range of eUr 77 to 82 million, which as budgeted is well below the previous year’s earnings. thanks to the reorganisation of the securities held by the bank, and the related exceptional gains last year, the interest rate yields are lower in 2016, and no earnings on sales of securities were budgeted.

8 BTV inTerim reporT AS oF 30/09/2016

ASSeTS in eUr thousand

30/09/2016 31/12/2015 Absolute change

Change in %

Cash reserves 326,532 146,757 +179,775 >+100 %Loans and advances to banks 1 [see notes] 320,687 319,764 +923 +0.3 %Loans and advances to clients 2 6,791,920 6,556,443 +235,477 +3.6 %Loan loss provisions 3 –202,730 –196,882 –5,848 +3.0 %Trading assets 4 25,302 25,104 +198 +0.8 %Financial assets – at fair value through profit or loss 5 138,044 149,957 –11,913 –7.9 %Financial assets – available for sale 6 1,429,852 1,477,027 –47,175 –3.2 %Financial assets – held to maturity 7 0 0 +0 +0.0 %Shares in at-equity-valued companies 8 494,504 468,488 +26,016 +5.6 %Intangible fixed assets 3,573 4,136 –563 –13.6 %property, plant and equipment 288,908 280,662 +8,246 +2.9 %Properties held as financial investments 52,862 51,551 +1,311 +2.5 %Current tax refunds 113 201 –88 –43.8 %Deferred tax refunds 32,863 23,951 +8,912 +37.2 %other assets 143,053 119,164 +23,889 +20.0 %

Total assets 9,845,483 9,426,323 +419,160 +4.4 %

LiABiLiTieS in eUr thousand

30/09/2016 31/12/2015 Absolute change

Change in %

Liabilities to banks 9 1,189,601 981,843 +207,758 +21.2 %Liabilities to clients 10 5,671,167 5,642,782 +28,385 +0.5 %Securitised debt 11 1,231,656 1,101,111 +130,545 +11.9 %Trading liabilities 12 8,531 9,964 –1,433 –14.4 %reserves and provisions 13 133,577 124,532 +9,045 +7.3 %Current tax liabilities 919 10,879 –9,960 –91.6 %Deferred tax liabilities 6,172 5,653 +519 +9.2 %other liabilities 128,482 124,011 +4,471 +3.6 %Subordinated capital 14 264,351 276,815 –12,464 –4.5 %equity 15 1,211,027 1,148,733 +62,294 +5.4 %

non-controlling interestsowners of the parent company

37,2651,173,762

33,5011,115,232

+3,763+58,531

+11.2 %+5.2 %

Total liabilities 9,845,483 9,426,323 +419,160 +4.4 %

Abridged consolidated financial statements

Balance Sheet as at 30 September 2016


ComprehenSiVe inCome Statement in eUr thousand

01/01–30/09/2016

01/01–30/09/2015*

absolute change

Change in %

interest and similar income 111,775 141,604 –29,829 –21.1 %interest and similar expenses –32,702 –42,328 +9,626 –22.7 %income from at-equity valued companies 29,533 29,630 –97 –0.3 %net interest income 16 108,606 128,906 –20,300 –15.7 %

loan-loss provisions 17 –12,889 –9,465 –3,424 +36.2 %Commission income 38,691 41,527 –2,836 –6.8 %Commission expenses –3,423 –3,645 +222 –6.1 %net commission income 18 35,268 37,882 –2,614 –6.9 %

trading income 19 3,460 3,188 +272 +8.5 %operating expenses 20 –131,866 –124,910 –6,956 +5.6 %other operating income 21 69,903 58,895 +11,008 +18.7 %Income from financial assets – at fair value through profit or loss 22

–1,180 –1,557 +377 –24.2 %

Income from financial assets – available for sale 23 1,309 79,195 –77,886 –98.3 %Income from financial assets – held to maturity 24 0 0 +0 +0.0 %Net pre-tax profit for the period 72,611 172,134 –99,523 –57.8 %

Taxes on earnings and profit –12,673 –22,163 +9,490 –42.8 %

Group profit for the period 59,938 149,971 –90,033 –60.0 %non-controlling interests 4,189 5,018 –829 –16.5 %owners of the parent company 55,749 144,953 –89,204 –61.5 %

Comprehensive income statement as at 30 September 2016

* 2015 adjusted to the changed scope of consolidation.



other ComprehenSiVe inCome in eUr thousand

01/01-30/09/2016

01/01-30/09/2015*

Group profit for the period 59,938 149,971revaluation from performance-oriented pension plans –5,395 407Changes in at-equity valued companies recognised directly in equity 4,795 –9,163Gains/losses with regard to deferred taxes, applied directly against equity 1,349 –102total of items which could subsequently not be allocated into profit or loss

749 –8,858

Unrealised profit/loss on assets held for sale (AfS reserve) 17,175 –57,699Changes in at-equity valued companies recognised directly in equity –3,162 4,595Unrealised gains/losses from adjustments in currency conversion –134 1,746Gains/losses with regard to deferred taxes, applied directly against equity –2,828 –485total of items which could subsequently be allocated into profit or loss

11,051 –51,843

total of other comprehensive income 11,800 –60,701

Comprehensive income for the period 71,738 89,270non-controlling interests 4,189 5,018owners of the parent company 67,549 84,252

Key FiGUreS 30/09/2016 30/09/2015*

epS in eUr 26 2.03 5.80roe before tax 8.22 % 21.79 %roe after tax 6.79 % 18.83 %Cost/income ratio 60.7 % 54.6 %risk/earnings ratio 11.9 % 7.3 %


Statement of change in equity

Statement oF ChanGeS in eqUity in eUr thousand

Subscribed capital

reserves retained earnings

afS reserve

actuarial profit/loss

total owners of the parent

company

non-controlling

interests

equity

equity as at 01/01/2015* 50,000 61,133 835,492 75,642 –31,379 990,888 33,138 1,024,026Capital increases 0 0 0 0 0 0 0 0Comprehensive income for the period revenue other income

00

00

144,953 –3,409

0–57,699

0407

144,953–60,701

5,0180

149,971–60,701

distributions 0 0 –7,601 0 0 –7,601 0 –7,601own shares 0 70 0 0 0 70 0 70other changes with a neutral effect on results

0 –4 86 0 0 82 –614 –532

Equity at 30/09/2015* 50,000 61,199 969,521 17,943 –30,972 1,067,691 37,542 1,105,233

Statement oF ChanGeS in eqUity in eUr thousand

Subscribed capital

reserves retained earnings

afS reserve

actuarial profit/loss

total owners of the parent

company

non-controlling

interests

equity

equity at 01/01/2016 55,000 107,060 972,113 11,002 –29,943 1,115,232 33,501 1,148,733Capital increases 0 0 0 0 0 0 0 0Comprehensive income for the periodrevenueother income

00

00

55,74920

017,175

0–5,395

55,74911,800

4,1890

59,93811,800

distributions 0 0 –8,351 0 0 –8,351 –109 –8,459own shares 0 –66 0 0 0 –66 0 –66other changes with a neutral effect on results

0 0 –602 0 0 –602 –317 –919

Equity at 30/09/2016 55,000 106,994 1,018,929 28,177 –35,338 1,173,762 37,265 1,211,027

* 01/01/2015 and 30/09/2015 each adjusted for the change in the scope of consolidation.


Cash flow statement as at 30 September 2016

CaSh FloW Statement in eUr thousand 01/01-30/09/2016

01/01-30/09/2015*

Cash position at the end of the previous period 146,757 173,002Operating cash flow 233,831 108,412Investment cash flow –29,515 –54,242Financing cash flow –24,541 –51,621Cash position at the end of the period 326,532 175,551



accounting and valuation principlesthe present interim BtV Group accounts as at 30/09/2016 have been drawn up according to iFrS regulations and interpretations by the international Financial reporting interpretations Committee (iFriC) that exempt from preparation of consolidated financial statements as defined by section 59a of the austrian Banking act (Bankwesengesetz - BWG) in conjunction with section 245a of the austrian Commercial Code (Unternehmensgesetzbuch - UGB) and in accordance with iaS 34 (interim Financial reporting).

the Bank für tirol und Vorarlberg aG is an ‚aktiengesellschaft’ (public limited company) headquartered in austria. the company’s registered office is Stadtforum in 6020 Innsbruck. The main activities of the company and its subsidiaries include asset management, corporate and retail banking, the holding of participations and the operation of funicular railways and other tourism operations. the segment reporting contains more detailed information on this.

the accounting and valuation methods applied uniformly across the group comply with the standards for european balance sheets, so that the informative value of these group financial statements equates to those pursuant to the provisions of the austrian Commercial Code (UGB), in conjunction with the provisions of the austrian Banking act (BWG). the group interim report was prepared according to the same accounting principles as those applied to the audited annual BtV Group accounts 2015.

principles of consolidation and scope of consolidationAll significant subsidiaries which are controlled by BtV under iFrS 10 are consolidated in the group financial statements, pursuant to IFRS 10. The Group controls a company if it is exposed to fluctuating returns on its commitment to the company or possesses rights thereon and has the ability to influence these returns using its power of control over the company. in accordance with the principles of iFrS 3, the consolidation of capital in the context of the acquisition method is performed by offsetting the consideration against the proportionally identified assets and liabilities. the assets and liabilities of the subsidiaries are stated at their respective fair market values at the time of acquisition. as part of the consideration, shares of other associates are valued with their share in the identified assets and liabilities. the difference between the acquisition costs and the net asset recorded at fair value is capitalised as goodwill. the capitalised goodwill is subject to an annual impairment test pursuant to the provisions of iFrS 3, in connection with iaS 36 and iaS 38. Subsidiaries of low significance for the asset, financial and income situation of the group are not fully consolidated.

the scope of full consolidation has not changed compared with 31/12/2015. the company Josefsheim projektentwicklungsgesellschaft mbh was renamed „das Schruns“ hotelprojektentwicklungsgesellschaft mbh. as at 30 September 2016, the group of consolidated companies includes the following holdings:

BtV Group: notes to the accounts 2016


FUlly ConSolidated CompanieS Share in % Voting rights in %

BtV leasing Gesellschaft m.b.h., innsbruck 100.00 % 100.00 %BtV real-leasing Gesellschaft m.b.h., Vienna 100.00 % 100.00 %BtV real-leasing i Gesellschaft m.b.h., innsbruck 100.00 % 100.00 %BtV real-leasing ii Gesellschaft m.b.h., innsbruck 100.00 % 100.00 %BtV real-leasing iii nachfolge Gmbh & Co KG, innsbruck 100.00 % 100.00 %BtV real-leasing iV Gesellschaft m.b.h., innsbruck 100.00 % 100.00 %BtV real-leasing V Gesellschaft m.b.h., innsbruck 100.00 % 100.00 %BtV anlagenleasing 1 Gmbh, innsbruck 100.00 % 100.00 %BtV anlagenleasing 2 Gmbh, innsbruck 100.00 % 100.00 %BtV anlagenleasing 3 Gesellschaft m.b.h., innsbruck 100.00 % 100.00 %BtV anlagenleasing 4 Gmbh, innsbruck 100.00 % 100.00 %BtV leasing deutschland Gmbh, munich 100.00 % 100.00 %BtV leasing Schweiz aG, Staad 99.99 % 99.99 %

BtV hybrid i Gmbh, innsbruck 100.00 % 100.00 %BtV hybrid ii Gmbh in liqu., innsbruck 100.00 % 100.00 %mpr holding Gmbh, innsbruck 100.00 % 100.00 %

time holding Gmbh, innsbruck 100.00 % 100.00 %VomonoSi Beteiligungs aG, innsbruck 100.00 % 100.00 %

Silvretta montafon Gmbh, Gaschurn 100.00 % 100.00 %Silvretta montafon Gastronomie Gmbh, Gaschurn 100.00 % 100.00 %Silvretta Skischule Gmbh, Gaschurn 100.00 % 100.00 %Silvretta Verwaltungs Gmbh, Gaschurn 100.00 % 100.00 %Silvretta montafon Sporthotel Gmbh & Co. KG, Gaschurn 100.00 % 100.00 %hJB projektgesellschaft mbh, St. Gallenkirch 100.00 % 100.00 %„das Schruns“ hotelprojektentwicklungsgesellschaft mbh, St. Gallenkirch 100.00 % 100.00 %Silvretta Sportservice Gmbh, Schruns 51.00 %* 51.00 %Skischule Silvretta montafon St. Gallenkirch Gmbh, St. Gallenkirch 50.00 % 50.00 %

BtV Beteiligungsholding Gmbh, innsbruck 100.00 % 100.00 %BtV 2000 Beteiligungsverwaltungsgesellschaft m.b.h., innsbruck 100.00 % 100.00 %

mayrhofner Bergbahnen aG, mayrhofen 50.52 % 50.52 %


leasing companies and the companies of the Silvretta montafon Bergbahnen Group were included in the Business Forecast as at 30/09, in accordance with their divergent financial year. The balance sheet date of Skischule Silvretta montafon St. Gallenkirch Gmbh is 31/05. BtV Beteiligungsholding Gmbh, BtV 2000 Beteiligungsverwaltungsgesellschaft m.b.h. and Mayrhofner Bergbahnen AG finish their financial year on 30/11. the companies of Silvretta montafon and mayrhofner Bergbahnen aG have a divergent accounting date due to their seasonal activity. owing to the structural situation in the group organisation, there is a different reporting date for both the leasing companies as well as BtV Beteiligungsholding Gmbh and BtV 2000 Beteiligungsverwaltungsgesellschaft m.b.h.

the remaining fully consolidated companies were considered to have a reporting date for their financial statements of 31 december.

mpr holding Gmbh holds 100% of the shares in VomonoSi Beteiligungs aG as at 30 September 2016 there are only indirect minority interests, which are the result of the holding in Silvretta Sportservice Gmbh and Skischule Silvretta montafon St. Gallenkirch Gmbh.

*Silvretta montafon Gmbh holds 51% of the shares in Silvretta Sportservice GmbH with its registered office in Schruns. as part of the articles of association, with regard to the remaining shares amounting to 49%, a call option was agreed for the acquisition of Silvretta montafon Gmbh and a put option was agreed for the purchase of the remaining company shares in Silvretta montafon Gmbh. Based on estimates by the management of Silvretta montafon Gmbh, all shares of Silvretta Sportservice Gmbh are included in the group accounts as group shares.

in addition, Silvretta montafon Gmbh holds 50% of the shares in the Skischule Silvretta montafon St Gallenkirch GmbH, with its registered office in St. Gallenkirch.

BtV Beteiligungsholding Gmbh holds 100% of the shares in BtV 2000 Beteiligungsverwaltungsgesellschaft m.b.h. BtV 2000 Beteiligungsverwaltungsgesellschaft m. b. h. holds 50.52% of the shares in mayrhofner Bergbahnen aG. there are direct minority interests which result from the holding in mayrhofner Bergbahnen aG.

the share of earnings for the period allocated to minority interests amounts to eUr 4,189 thousand.

at the annual General meeting of mayrhofner Bergbahnen aG on 01/07/2016, a dividend of eUr 200,000 was agreed, of which eUr 99,000 was assigned to minority interests.

Significant holdings over which BTV has a major influence are recorded by the equity method. as a rule, a stake of between 20% and 50% is considered to be a significant influence („associated companies“). according to the equity method, holdings in associated companies are included in the financial statements at acquisition cost plus any changes in the group’s share of the net assets of the associated company after the initial consolidation.


the following holdings were included using the equity method:

BKS Bank aG based in Klagenfurt and oberbank aG based in linz are regional universal banks and together with BtV form the 3 Banken Group. drei-Banken Versicherungs-agentur Gmbh was renamed (formerly: drei-Banken Versicherungs-aktiengesellschaft). moser holding aG is active in publishing with a focus on print (daily newspapers, free weekly newspapers and magazines) and online.

the holdings in oberbank aG and BKS Bank aG have been included in the group financial statements for the following reasons, despite the fact that they are below the 20% holding threshold: there are syndicate agreements in place between BtV, BKS Bank aG and Wüstenrot Wohnungswirtschaft reg. Gen.m.b.h. for the holding in oberbank aG and between BtV, oberbank aG and Generali 3 Banken holding aG for the holding in BKS Bank aG, the purpose of which is to maintain the autonomy of the institutions.

in this way, for both of the cited companies, there is the possibility of exercising a significant influence.

For the purposes of drawing up the annual financial statements in a timely fashion, at-equity valued companies are included for the period from 1 october 2015 to 30 June 2016. receivables and liabilities, expenses and income internal to the group are eliminated except where they are insignificant. An interim net profit elimination has been waived, since material interim net profit figures were not available.

alpenländische Garantie-Gesellschaft m.b.h. is classed as joint operations. the company has a concession under Section 1 para. 1, line 8, of the austrian Banking act (BWG). its exclusive corporate object is the granting of guarantees, sureties and other liabilities for lending businesses of the 3 Banken Group. the 3 Banken Group is primarily the only source for payment flows that contribute to the continued activities of the arrangement. it is therefore classed as a joint operation in accordance with iFrS 11.B29-32. the proportional assets and liabilities of the company are considered on the reporting date of 30 September.

at eqUity ConSolidated CompanieS Share in % Voting rights in %

BKS Bank aG, Klagenfurt 18.89 % 19.57 %oberbank aG, linz 16.24 % 17.49 %drei Banken Versicherungsagentur Gmbh, linz 20.00 % 20.00 %moser holding aG, innsbruck 24.99 % 24.99 %

proportionally ConSolidated CompanieS Share in % Voting rights in %

alpenländische Garantie-Gesellschaft m.b.h. 25.00 % 25.00 %

main business events in the period reported the resolutions adopted at the 98th annual General meeting of the Bank für tirol und Vorarlberg aG on 11/05/2016, are shown on the BtV homepage (www.btv.at) under the heading „Company“.

in october, a capital increase was carried out at BKS Bank aG, Klagenfurt. BtV’s share in this capital increase is eUr 10,823 thousand.

in october, the merger of mpr holding Gmbh and VomonoSi Beteiligungs aG was recorded in the Companies register. in the 4th quarter of 2016 the consolidation scope of BtV will change.

apart from this, since the date of the interim report there have not been any other activities or events in the BtV Group which are required to be reported due to their form or content, and which affected the picture of the asset, financial and earnings situation conveyed by this report.


Balance sheet – assets

1 loanS and adVanCeS to BanKS in eUr thousand 30/09/2016 31/12/2015

loans to domestic credit institutions 78,979 133,101loans to foreign credit institutions 241,708 186,663

Loans to credit institutions 320,687 319,764

2 loanS to ClientS in eUr thousand 30/09/2016 31/12/2015

loans to austrian clients 4,462,531 4,327,435loans to foreign clients 2,329,389 2,229,008

Loans to clients 6,791,920 6,556,443

3 loan loSS proViSionS in eUr thousand 30/09/2016 31/12/2015

opening balance of loan transactions at 01/01. 196,882 199,274– releases –7,297 –12,894+ allocation 19,584 22,358– application –6,427 –11,271

(+/–) Other reclassifications/Change in consolidation scope 0 –859(+/–) Changes arising from currency differences –12 274

Loan loss provisions in the credit business 202,730 196,882

opening balance of credit business reserves at 01/01. 35,626 38,657– releases –10,918 –217+ allocation 10,614 6,367– application 0 0

(+/–) Other reclassifications/Change in consolidation scope –1,816 –9,196(+/–) Changes arising from currency differences –1 15

Credit transactions reserves 33,505 35,626

overall total risk provisions 236,235 232,508


4 tradinG aSSetS in eUr thousand 30/09/2016 31/12/2015

Debenture bonds and other fixed-interest securities 0 0equities and other variable-interest securities 0 0positive market values arising from derivative transactions – trading 7,004 7,453positive market values arising from derivative transactions – Fair value option 18,298 17,651

Trading assets 25,302 25,104

5 FinanCial aSSetS – at Fair ValUe throUGh proFit or loSS in eUr thousand 30/09/2016 31/12/2015

Debenture bonds and other fixed-interest securities 108,144 120,634equities and other variable-interest securities 29,900 29,323

Financial assets - at fair value through profit or loss 138,044 149,957

7 FinanCial aSSetS – held to matUrity in eUr thousand 30/09/2016 31/12/2015

Debenture bonds and other fixed-interest securities 0 0

Financial assets – held to maturity 0 0

8 ShareS in at-eqUity ValUed CompanieS in eUr thousand 30/09/2016 31/12/2015

Credit institutions 478,184 451,752non-credit institutions 16,320 16,736

Shares in at-equity valued companies 494,504 468,488

6 FinanCial aSSetS – aVailaBle For Sale in eUr thousand 30/09/2016 31/12/2015

Debenture bonds and other fixed-interest securities 1,333,449 1,375,787equities and other variable-interest securities 5,315 10,351other shareholdings 52,816 52,732Other affiliated shareholdings 38,272 38,157

Financial assets - available for sale 1,429,852 1,477,027


Balance sheet – liabilities

9 liaBilitieS to BanKS in eUr thousand 30/09/2016 31/12/2015

austrian credit institutions 550,948 562,995Foreign credit institutions 638,653 418,848

Liabilities to credit institutions 1,189,601 981,843

10 liaBilitieS to ClientS in eUr thousand 30/09/2016 31/12/2015

Savings depositsaustrian 1,067,205 1,034,868Foreign 175,921 165,937

Sub-total savings deposits 1,243,126 1,200,805

other depositsaustrian 3,238,468 3,345,920Foreign 1,189,573 1,096,057

Sub-total other deposits 4,428,041 4,441,977

Liabilities to clients 5,671,167 5,642,782

11 SeCUritiSed deBt in eUr thousand 30/09/2016 31/12/2015

debentures 873,759 850,064domestic bonds 357,897 251,047

Securitised debt 1,231,656 1,101,111

of which fair value 411,883 413,294

12 tradinG liaBilitieS in eUr thousand 30/09/2016 31/12/2015

negative market values arising from derivative transactions – trading 4,656 3,292negative market values arising from derivative transactions – Fair value option 3,875 6,672

Trading liabilities 8,531 9,964


14 SUBordinated Capital in eUr thousand 30/09/2016 31/12/2015

Subordinated capital 264,351 276,815

Subordinated capital 264,351 276,815

of which fair value 206,898 210,259

13 reSerVeS and proViSionS in eUr thousand 30/09/2016 31/12/2015

long-term payroll reserves 90,002 84,773other reserves and provisions 43,575 39,759

Reserves and provisions 133,577 124,532


the consolidated capital of the Group is reported in accordance with the provisions of Basel iii. this is based on eU regulation 575/2013 (Capital requirements regulation – Crr), in conjunction with the austrian Crr accompanying regulation. the capital according to Crr consists of the common equity (Common equity tier 1 – Cet1), the additional core capital (additional tier 1 – at1) and supplementary capital (tier 2 – t2). the respective capital ratios are determined by contrasting the corresponding regulatory capital component after taking into account all regulatory deductions and transitional provisions of the overall measure of risk. Under the provisions of the Crr

a minimum requirement of 4.5% is planned for Cet1 which will be increased by the capital buffer defined in accordance with Crd iV (Capital requirements directive iV). For the entire core capital, a minimum requirement of 6.0% is provided; the total capital must reach a value of 8.0%. the leverage ratio indicates the ratio of the common equity (tier 1) to the leverage exposure (unweighted asset items of the balance sheet and off-balance-sheet transactions pursuant to Crr). the provisions for calculating and disclosure of the leverage ratio within the eU are implemented by BtV as part of their disclosure obligations.

15 reGUlatory Capital and deBt leVelS


ConSolidated eqUity Under Crr in eUr million 30/09/2016 31/12/2015

Common equity (Cet1)Capital instruments qualifying as Cet1 150.8 150.8proprietary Cet1 instruments –9.5 –9.5retained earnings and other surplus reserves 935.1 927.2aggregated other income 19.4 19.4other reserves 121.5 127.6transitional changes owing to the transitional provisions for Cet1 capital instruments 3.0 3.5

Prudential filters 0.8 0.8Goodwill 0.0 0.0other intangible assets 0.0 0.0Regulatory changes in connection with CET1 instruments of financial companies. in which the bank holds a substantial interest

–376.1 –351.8

other transitional changes to Cet1 76.1 82.9Common equity (Cet1) 921.0 950.9

additional core capital (additional tier 1)Changes owing to the transitional provisions for additional tier 1 capital instruments 21.0 24.5

other transitional changes to additional tier 1 –21.0 –24.5additional core capital (additional tier 1) 0.0 0.0

Core capital (tier 1): sum of common equity (Cet1) and additional (at1) core capital 921.0 950.9

Supplementary capital (tier 2)paid-up capital instruments and subordinated loans 94.7 97.1direct positions in supplementary capital instruments 0.0 –0.4Changes owing to the transitional provisions for supplementary capital instruments and subordinated loans

10.2 15.1

other transitional changes to supplementary capital –72.7 –84.8Supplementary capital (tier 2) 32.2 27.0total qualifying equity 953.2 977.9total risk-weighted assets 6,546.9 6,262.7

Common equity tier 1 ratio 14.07 % 15.18 %Core capital ratio 14.07 % 15.18 %equity ratio 14.56 % 15.61 %


Comprehensive income statement notes

16 net intereSt inCome in eUr thousand 01/01-30/09/2016

01/01-30/09/2015

interest and similar income fromlending and money market transactions with credit institutions 6,379 3,988lending and money market transactions with clients 96,516 100,557Debenture bonds and fixed-interest securities 3,288 24,744equities and variable-rate securities 494 536other shareholdings 2,020 2,713other transactions 3,078 9,066

Sub-total interest and similar income 111,775 141,604

interest and similar expenses onCredit institutions deposits –3,867 –9,842Customer deposits –12,188 –10,887Securitised debt –5,490 –1,905Subordinated capital –3,437 –10,850other trades –7,720 –8,844

Sub-total interest and similar expenses –32,702 –42,328

income from at-equity valued companies 29,533 29,630

Net interest income 108,606 128,906

17 loan loSS proViSionS in eUr thousand 01/01-30/09/2016

01/01-30/09/2015

allocation of on-balance sheet provision –19,808 –13,569allocation of off-balance sheet provision –10,614 –3,037loan loss insurance premiums 0 0release of on-balance sheet provisions 7,306 7,352release of off-balance sheet provisions 10,918 117direct amortisation –817 –472income from amortised receivables 126 144

Loan-loss provisions in the credit business –12,889 –9,465

the allocations to and write backs from provisions for off-balance sheet loan risks are contained in the above figures.


the level of the workforce was reduced by the number of employees delegated to subsidiaries outside the circle of companies covered by the iFrS consolidation.

19 tradinG inCome in eUr thousand 01/01-30/09/2016

01/01-30/09/2015

income from derivatives 1,992 518income from securities 357 339income from foreign exchange and notes and coins transactions 1,111 2,331

Trading income 3,460 3,188

20 operatinG eXpenSeS in eUr thousand 01/01-30/09/2016

01/01-30/09/2015

payroll –70,666 –68,135materials –39,822 –37,846amortisation –21,378 –18,929

Operating expenses –131,866 –124,910

18 CommiSSion inCome in eUr thousand 01/01-30/09/2016

01/01-30/09/2015

Credit transaction 4,998 5,308payment transactions 9,226 9,190Securities trading 16,993 19,125Currency, foreign exchange and precious metals trading 2,853 2,971other services business 1,198 1,288

Net commission income 35,268 37,882

20a aVeraGe nUmBer oF employeeS, WeiGhted by person-years 30/09/2016 30/09/2015

White collar 933 897Blue collar 491 340

Payroll 1,424 1,237


21 other operatinG inCome in eUr thousand 01/01-30/09/2016

01/01-30/09/2015

other operating income 100,327 90,083other operating expenses –30,381 –31,154hedge accounting income –43 –34

Other operating profit 69,903 58,895

22 inCome From FinanCial aSSetS – at Fair ValUe throUGh proFit or loSS in eUr thousand

01/01-30/09/2016

01/01-30/09/2015

Profit arising from financial assets – at fair value through profit or loss –1,180 –1,557

Profit arising from financial assets – at fair value through profit or loss –1,180 –1,557

23 proFit ariSinG From FinanCial aSSetS – aVailaBle For Sale in eUr thousand 01/01-30/09/2016

01/01-30/09/2015

Profit arising from financial assets – available for sale 1,309 79,195

Profit arising from financial assets – available for sale 1,309 79,195

24 proFit ariSinG From FinanCial aSSetS – held to matUrity in eUr thousand 01/01-30/09/2016

01/01-30/09/2015

Profit arising from financial assets – held to maturity 0 0

Profit arising from financial assets – held to maturity 0 0


25 perFormanCe BondS and Credit riSKS in eUr thousand 30/09/2016 30/09/2015

Securities/guarantees 255,930 244,561Credit risks 1,261,621 1,370,583

Performance bonds and credit risks 1,517,551 1,615,144

26 epS (ordinary and preFerenCe ShareS) 30/09/2016 30/09/2015

equities (ordinary and preference shares) 27,500,000 25,000,000Average float (ordinary and preference shares) 27,469,040 24,990,242net Group income in eUr thousand 55,749 144,953

epS (earnings per share) in eUr 2.03 5.80diluted earnings per share in eUr (ordinary and preference shares) 2.03 5.80

the diluted earnings per share are the same as the un-diluted earnings per share as no financial instruments with diluting effect were issued.

these means that there is no difference between the values „earnings per share“ and „diluted earnings per share“.

Sectors in eUr thousand italy UK ireland Spain Greece russia total

loans and insurance 17,013 6,409 3,010 0 0 0 26,432public sector 0 0 0 0 0 0 0remaining sectors 106,397 5,491 77 202 3 1 112,171

Total 123,410 11,900 3,087 202 3 1 138,603

total Credit riSK: CreditWorthineSS StrUCtUre By SeCtorS oF SeleCted CoUntrieS at 30/09/2016

Creditworthiness by sector of selected countriesthe following table illustrates the volume of receivables owed by borrowers in selected countries, categorised by sectors. against the backdrop of recent trends in the

financial markets, the loan, insurance and public authority sectors have been highlighted. there was no liability to portugal or Ukraine on the reporting date of 30/09/2016. the liability to the United Kingdom was represented due to Brexit.


27 Fair ValUe hierarChy oF FinanCial inStrUmentS WhiCh are ValUed at Fair ValUe

The financial instruments reported at fair value are classified at fair value in the three-tier valuation hierarchy as follows.

This hierarchy reflects the significance of the input data used for the valuation and is classified as follows: quoted prices in active markets (level 1): this category contains equity, corporate bonds and government lending listed on major exchanges. the fair value of financial instruments traded in active markets is calculated on the basis of quoted prices, in so far as these represent prices applied within the context of regular and current transactions. An active market must fulfil cumulatively the following conditions:

• the products traded on the market are homogenous,

• normally willing contractual buyers and sellers can be found any time and

• prices are available to the public.

A financial instrument is seen as listed on an active market if its prices are available easily and regularly from a stock exchange, a trader or broker, an industry group, a price service agency or a supervisory authority and these prices represent actual and regularly occurring market transactions.

Valuation procedure through observable parameters (level 2): this category includes otC derivative contracts, receivables and issued debt securities of the Group classified at fair value.

Valuation procedures through significant unobservable parameters (level 3): The financial instruments in this category show input parameters which are based on unobservable markets.

The allocation of certain financial instruments to the categories requires a systematic assessment, especially if the valuation is based on both observable as well as unobservable market parameters. the instrument classification may also change over time in consideration of changes to the market parameters.

For securities and other investments which are valued at fair value, the following valuation processes are applied:

level 1 the fair value is derived from the transaction prices as traded on the stock exchange.

level 2Securities which are not traded in an active market are valued by means of the discounted cash flow method. This means that the future projected cash flows are discounted by means of suitable discount factors in order to calculate the fair value. the discount factors contain both the credit curve without credit risk as well as the credit spreads which follow the credit rating and the rank of the issuer. the interest curve for discounting contains securities account, money-market futures and swap rates as observable on the market. the calculation of the credit spread follows a 3-step process:

1) if there is for the issuer a bond of the same rank and of the same remaining term which is actively traded on the market, this credit spread is used.2) if there is no comparable bond which is actively traded on the market, the credit default swap spread (CdS spread) with a similar term is applied. 3) if there is neither a comparable bond traded on the market nor an actively traded CdS, then the credit spread from a comparable issuer is applied (level 3). this approach is currently not being used at the BtV group.


level 3the accompanying current values of the mentioned financial assets in the third stage where determined in accordance with generally recognised valuation processes. Significant parameters are the depreciation rate as well as long-term success and capitalisation values with consideration of the experience of the management as well as knowledge of the market conditions of the specific industry.

the issues are categorised at level 2 and the valuation takes place in accordance with the following process:

level 2the own issues are not subject to active trade on the capital market. instead they are retail issues and private placements. the valuation consequently takes place by means of a discounted cash flow valuation model. this is based on an interest curve based on money market interest rates and swap interest as well as BtV’s credit spreads. the credit spreads align themselves with the spreads that are payable at the time for an interest rate hedging transaction (interest spread on swap).

the derivatives are also categorised at level 2. the following valuation processes are applied:

level 2Derivative financial instruments are divided into derivatives with a symmetrical payment profile as well as derivatives with an asymmetrical payment profile. at BtV, derivatives with a symmetrical payment profile contain interest derivatives (interest swaps and interest rate forwards) and foreign currency derivatives (FX Swaps, cross currency swaps and FX outright transactions). these derivatives are calculated by means of the discounted cash flow method which is based on money market interest rates, money market futures-interest rates, swap interest rates as well as basis spreads which can be observed continually on the market.

at BtV, derivatives with an asymmetrical payment profile contain interest derivatives (caps and floors). the calculation of the fair value occurs here by means of the Black-76-option price model. all inputs are either completely directly observable on the market (money market rates, money market futures- interest rates as well as swap interest rates) or derived from input factors observable on the market (caps / floor volatilities implicitly deducted from option prices).

the following tables show the fair value valuation methods used in order to determine the fair value of the balance sheet financial instruments.


Fair ValUe hierarChy oF FinanCial inStrUmentS WhiCh are ValUed at Fair ValUeaS oF 30/09/2016 in eUr thousand

prices listed in active markets

level 1

Valuation methods based on

market data

level 2

Valuation methods

not based on market data

level 3Financial assets stated at fair value

trading portfolio securities 0 0 0Positive market values from derivative financial instruments 0 104,015 0Assets classified at fair value 112,729 25,315 0Financial assets available for sale 1,258,988 79,776 65,272

Overall financial assets classified at fair value 1,371,717 209,106 65,272

Financial liabilities stated at fair valueNegative market values from derivative financial instruments 0 38,457 0Liabilities classified at fair value 0 618,781 0

Overall liabilities classified at fair value 0 657,238 0

Fair ValUe hierarChy oF FinanCial inStrUmentS WhiCh are ValUed at Fair ValUe aS at 31/12/2015 in eUr thousand

prices listed in active markets

level 1

Valuation methods based on

market data

level 2

Valuation methods

not based on market data

level 3Financial assets stated at fair value

trading portfolio securities 0 0 0Positive market values from derivative financial instruments 0 89,163 0Assets classified at fair value 124,115 25,781 61Financial assets available for sale 1,345,074 41,064 65,285

Overall financial assets classified at fair value 1,469,189 156,008 65,346

Financial liabilities stated at fair valueNegative market values from derivative financial instruments 0 36,608 0Liabilities classified at fair value 0 623,554 0

Overall liabilities classified at fair value 0 660,162 0


movements between level 1, level 2 and level 3 in the current reporting year 2016, there have not been any movements between the individual levels.

repayments of eUr 60 thousand resulting from the redemption of fund shares. Subscription rights of eUr 13,000 in a holding were removed from Financial assets held for Sale.

moVementS in leVel 3 oF FinanCial inStrUmentS aSSeSSed at Fair ValUe in eUr thousand

Jan 16 Success in profit and

loss

Success from other

operating income

purchases Sales, re-payments

transfer to level 3

transfer from level

3

Currency conversion

Sep 16

trading portfolio securities 0 0 0 0 0 0 0 0 0positive market values from derivative financial instruments

0 0 0 0 0 0 0 0 0

Classified at fair value - assets

61 –1 0 0 –60 0 0 0 0

available for sale financial assets

65,285 –13 0 0 0 0 0 0 65,272

Overall financial assets classified at fair value

65,346 –14 0 0 –60 0 0 0 65,272

28 Fair ValUe oF FinanCial inStrUmentS, WhiCh are not ValUed at Fair ValUe

aSSetS in eUr thousand

Fair value 30/09/2016

Book value 30/09/2016



Cash reserves 326,532 326,532 146,757 146,757loans to credit institutions 302,759 320,687 320,115 319,764loans to clients 7,164,009 6,791,920 6,922,973 6,556,443Financial assets – held to maturity 0 0 0 0

liaBilitieS in eUr thousand Fair value 30/09/2016




liabilities to credit institutions 1,188,526 1,189,601 1,001,151 981,843liabilities to clients 5,684,911 5,671,167 5,658,150 5,642,782Securitised debt 820,537 819,773 685,266 687,817Subordinated capital 57,454 57,453 66,638 66,557

in the following table for each balance sheet item the fair market value is compared to the book value. the market value is the amount, which in an active market could be raised from the sale of a financial instrument or which would need to be paid to make an equivalent purchase.

For positions without a contractually fixed term the relevant book value was applied. Where no market prices are available, approved valuation models were used, especially the analysis of discounted cash flows and option pricing models.


30 SeGment reportinG

Segment reporting is provided by BtV Group as required by the information and valuation rules of iFrS 8. Segment information is based on what is known as the „management approach“. this requires segment information to be presented according to internal reporting as it is regularly used by the company’s key decision-makers for decisions on allocation of resources to the segments and to assess their performance. the qualitative and quantitative thresholds defined in IFRS 8 are met by this segment reporting. the business areas are reported as independent businesses.

Segment reporting is based on internal divisional accounting for the corporate and retail customers business areas, on the overall bank report for the institutional clients and banks business area, on the reporting package and the monthly report for the BtV leasing subgroup, the respective monthly report for the Silvretta montafon Group and the respective monthly report for mayrhofner Bergbahnen aG. These reports reflect the structure of management responsibilities within BtV in 2016. these internal reports to the Board of directors, which only satisfy iFrS accounting standards in part, are supplied monthly and are almost totally automated by preparatory systems and interfaces. the reporting dates for the data are the respective period closing dates of the subsidiaries included in the consolidated financial statements. The information of the internal and external accounting system is based on the same base data and is agreed in the Finance and Controlling division for the reports. a reciprocal check, current agreements or plausibility checks between the Sales and Strategy Controlling, risk Controlling, reporting and Balance Sheet presentation and tax and accounting groups are therefore guaranteed. the criterion for separation of business areas is primarily

who is responsible for looking after the customers. Changes in this responsibility can also lead to changes in attribution to a segment during the course of a year. These effects were, where insignificant, not corrected in the comparison with last year.

in 2016, the following business areas have been defined within BTV:the corporate client business area is responsible for small, medium and large business clients and chartered accountants and auditors. the retail client business area is responsible for the retail clients, freelance professionals and micro-companies market segments. the institutional clients and banks division mainly includes treasury and trading activities. BtV leasing brings together all leasing operations of BtV aG. the cable cars sector includes the Silvretta montafon Group and mayrhofner Bergbahnen aG, which contain all of the two companies’ tourism activities. the results of these segments also include transactions between segments, particularly between the corporate customer segment and leasing and the cable cars. Services are transferred at market prices. Alongside these five reporting segments, is the „other segments/Consolidations/misc.“ heading. this item reports the results from service areas across BtV, such as Finance and Controlling, legal and investments, quality management, marketing and Communications and Group auditing etc. in addition, the effects of consolidation and fully consolidated companies below the thresholds (alpenländische Garantie-Gesellschaft m.b.h., BtV hybrid i Gmbh and BtV hybrid ii Gmbh in liqu. as well as time holding Gmbh) are allocated to this segment.

The results of the five reporting segments are described below.


Corporate client segmentthe corporate client sector is the largest division in terms of earnings at BtV. operating interest income forms its main revenue component. thanks to the clear increase in volumes in the annual average compared to the third quarter 2015, interest earnings rose by eUr +6.1 million to eUr 70.6 million.

loan loss provisions in the lending business affect the results in this segment negatively by eUr 7.4 million. Compared with quarter 3 2015, loan loss provisions in the corporate client segment rose by eUr +0.9 million.

due to reduced earnings from securities, the provision earnings fell by eUr –0.9 million to eUr 15.8 million in the third quarter of 2016. Because of the expansion of both staff and premises, the administrative costs in this segment rose by eUr +1.1 million to eUr 21.6 million. Segment receivables grew by eUr +636 million to eUr 5,025 million because of strong new business. Segment liabilities increased from eUr 1,855 million to eUr 2,144 million. overall, the pre-tax profit for the period increased clearly by eUr +3.2 million to eUr 57.3 million compared to the previous year.

retail client segmentthe retail client business is the second pillar of BtV, and contributed stable interest income of eUr 29.4 million to interest profits. The continued uncertainty following the turbulent developments in the financial markets (due to Brexit), above all in equities, also led to a fall in securities turnover in the third quarter. earnings from commission business of eUr 21.8 million in this important segment showed a fall of eUr –1.4 million. the cost intensity due to the retail sector typically being highly demanding in terms of staff and premises, led to an increase of +2.7% in the administrative overheads of EUR 36.4 million. Other operating profits remained stable and were at the same level as last year at eUr 0.5 million. Compared to the previous year, loan loss provisions for the lending business rose slightly from eUr –1.9 million to eUr –2.2 million. overall this segment achieved earnings before tax in this period of eUr 13.2 million (previous year eUr 15.8 million).

institutional clients and banks segmentthe clear fall in the results for the results in this segment in the institutional clients and banks business unit, is due to the sale in quarter 3 of 2015 of the majority of the bonds held in the bank’s own portfolio. in particular, due to the reorganised securities holdings with low coupons, the interest earnings at eUr 9.3 million were clearly down by EUR −22.5 million compared to the previous year. Income from financial assets, including trading income, also fell to eUr 2.8 million, (previous year: eUr 80.6 million). operating expenses in this segment totalled EUR 1.7 million. The pre-tax profit for the period totalled eUr 9.9 million.

leasing segmentBtV leasing showed welcome growth in this reporting quarter. the customer cash volume increased by eUr +93 million to eUr 847 million. Given the robust new business, the asset business shows a moderate increase by eUr +0.2 million to interest earnings of eUr 12.9 million. net commission income, at eUr 1.2 million, exceeded the same quarter in the previous year by eUr +0.9 million. loan loss provisions in the lending business fell by eUr –0.2 million and administrative costs by eUr –0.5 million. in total, BtV leasing achieved pre-tax earnings in the period of eUr 12.1 million, placing it +5.7% over the previous year.

Cable cars segmentthe cable cars sector includes mayrhofner Bergbahnen aG and the Silvretta montafon Group. Both companies are dominated by the trends in the tourism sector, and therefore their results are subject to strong seasonal variations. interest income fell by eUr –0.2 million, to eUr –0.8 million. other operating profit, which mainly includes the revenues, increased by eUr +4.9 million to eUr 76.8 million. these earnings are also the decisive factors for the Silvretta montafon Group, with its average of 464 employees in the reporting year, and mayrhofner Bergbahnen aG, with its average 163 employees. the overheads grew due to seasonal variations by +8.8% to eUr 54.7 million. in total, pre-tax earnings for the period were eUr 21.3 million, which is an increase of +1.6% over the previous year.


SeGment reportinG in eUr thousand

year Corporate clients

private clients

institutional clients

and banks

leasing Cable cars reporting segments

other segments/consolida-tion/misc.

Group Balance

sheet/p&l

net interest income 09/2016 70,577 29,417 9,287 12,895 –825 121,351 –42,278 79,07309/2015 64,459 29,353 31,761 12,710 –646 137,637 –38,361 99,276

income from at-equity valued companies

09/2016 0 0 0 0 0 0 29,533 29,53309/2015 0 0 0 0 0 0 29,630 29,630

loan-loss provisions in the credit business

09/2016 –7,415 –2,184 –466 –317 0 –10,382 –2,507 –12,88909/2015 –6,521 –1,862 1,954 –516 0 –6,945 –2,520 –9,465

net commission income 09/2016 15,769 21,826 0 1,183 0 38,778 –3,510 35,26809/2015 16,723 23,250 0 302 0 40,275 –2,393 37,882

operating expenses 09/2016 –21,606 –36,375 –1,677 –4,516 –54,694 –118,867 –12,999 –131,86609/2015 –20,536 –35,408 –1,491 –5,023 –50,291 –112,749 –12,161 –124,910

Other operating profit 09/2016 0 484 0 2,679 76,800 79,963 –10,060 69,90309/2015 0 447 0 3,700 71,887 76,034 –17,139 58,895

Profit arising from financial assets and trading profit

09/2016 0 0 2,750 176 0 2,926 663 3,58909/2015 0 0 80,552 274 0 80,826 0 80,826

result for the period before tax

09/2016 57,325 13,168 9,894 12,100 21,281 113,769 –41,159 72,61109/2015 54,125 15,780 112,776 11,447 20,950 215,078 –42,944 172,134

Segment loans 09/2016 5,025,414 1,336,479 2,163,377 847,320 23,291 9,395,881 –582,446 8,813,43509/2015 4,388,567 1,311,212 1,951,617 753,597 7,454 8,412,447 42,420 8,454,867

Segment liabilities 09/2016 2,144,317 3,185,875 2,426,682 796,077 93,301 8,646,252 –280,946 8,365,30609/2015 1,854,643 2,946,012 2,453,176 707,953 49,572 8,011,356 –129,760 7,881,596

Changes in this responsibility can lead to changes in attribution to a segment. these effects are not corrected in the year-on-year comparison.


Segment reporting: explanatory notesthe net interest income is allocated according to the market interest method. Sales figures are included in the corporate and retail clients for management reasons, among other items. income from at-equity valued companies is allocated to the „other segments/Consolidation/misc.“ area. net commission income is determined by the assignment of the internal divisional accounting (including all manual entries being assigned to commission). Costs are allocated to the respective segments in which they were incurred and the expenses of BtV leasing Gmbh or Silvretta montafon Group and mayrhofner Bergbahnen are directly allocated in accordance with the management reports. Costs that cannot be directly allocated are shown under „other segments/consolidation/misc.“ the other operating income includes, among other things, the revenue from the Silvretta montafon Group and mayrhofner Bergbahnen and, under „other Segments/Consolidation/misc.“, in addition to the consolidation effects, essentially the stability tax and rental operations.

the segment receivables include the entries for loans and advances to banks, loans and advances to clients, trading assets and all fixed-interest securities, guarantees and liabilities. the „other segments/consolidation/misc.“ column includes loan loss provisions, since the internal control considers the liabilities as net figures in contrast to the balance sheet. the postings resulting from consolidation are also found here. the items „liabilities to banks“, „liabilities to clients“, „Securitised debt“, „trading liabilities“ and „Subordinated capital“ are all shown under this segment’s liabilities. Consolidating entries are also included here in the „other segments/Consolidation/misc.“ column.

The success of the business field concerned is measured by the before-tax annual net profit generated by that segment.


declaration by the statutory representatives pursuant to Section 82 (4) and 87 (1) BörseG (Stock exchange act)

We confirm that, to the best of our knowledge, the abridged interim group financial statements drawn up in accordance with the relevant accounting standards convey as faithful a picture as possible of the asset, financial and profit position of the BTV group, and that the report paints as faithful a picture as possible of the asset, financial and profit position of the BTV group with reference to the important occurrences during the first nine months of the financial year and their effects on the abridged interim group financial statements with respect to the main risks and uncertainties to which the group is exposed.

execution of an audit and/or an examination of the interim report by an auditor has been waived.

innsbruck, november 2016

the Board of directors

Gerhard BurtscherChairman of the Board

responsible for: Corporate client division; institutional Clients and Banks, Group audit, marketing and Communications, personnel management; Compliance and money laundering.

michael pergermember of the Board

responsible for: retail client business; Group audit division; Compliance and money laundering.

mario pabstmember of the Board

responsible for: risk, process, it and cost management; the departments for finance and controlling, legal matters and investments and group audit; Compliance and money laundering.


overview of 3 Banken Group – Group information

proFit and loSS in eUr million 01/01-30/09/2016

01/01-30/09/2015

01/01-30/09/2016

01/01-30/09/2015

01/01-30/09/2016

01/01-30/09/2015

net interest income 117.2 119.5 267.7 283.5 108.6 128.9loan-loss provisions in the credit business –25.8 –25.2 –14.1 –33.7 –12.9 –9.5Commission income 36.6 39.2 96.0 99.7 35.3 37.9operating expenses –80.4 –79.2 –198.6 –181.8 –131.9 –124.9Other operating profit –6.2 –9.2 –6.8 –30.5 69.9 58.9Net pre-tax profit for the period 40.9 50.2 154.7 146.6 72.6 172.1Group profit for the period 36.9 44.0 129.8 125.9 59.9 150.0

reGUlatory Capital in eUr million 30/09/2016 31/12/2015 30/09/2016 31/12/2015 30/09/2016 31/12/2015

Basis for measuring capital 4,897.9 4,883.4 12,770.8 12,216.7 6,546.9 6,262.7equity 580.6 599.9 2,212.3 2,158.0 953.2 977.8

of which common equity (Cet1) 532.2 575.6 1,721.4 1,650.8 921.0 950.9of which total core capital (Cet1 and at1) 532.2 575.6 1,798.0 1,733.3 921.0 950.9

Common equity ratio in % 10.87 11.79 13.48 13.51 14.07 15.18Core capital ratio in % 10.87 11.79 14.08 14.19 14.07 15.18total capital ratio in % 11.85 12.28 17.32 17.66 14.56 15.61

nUmBer of resources 30/09/2016 31/12/2015 30/09/2016 31/12/2015 30/09/2016 31/12/2015

Weighted average number of employees 925 923 1.954 2.025 1.424 1.354number of branches 60 59 159 156 36 36

BKS Bank oberbank BtV

Company Key indiCatorS in% 30/09/2016 31/12/2015 30/09/2016 31/12/2015 30/09/2016 31/12/2015

return on equity before tax (roe) 6.09 % 7.33 % 10.42 % 11.20 % 8.22 % 15.88 %return on equity after tax 5.31 % 6.48 % 8.74 % 9.73 % 6.79 % 12.77 %Cost/income ratio 54.1 % 48.7 % 54.1 % 50.5 % 60.7 % 58.6 %risk/earnings ratio 22.0 % 29.2 % 5.3 % 12.4 % 11.9 % 9.7 %

BalanCe Sheet FiGUreS in eUr million 30/09/2016 31/12/2015 30/09/2016 31/12/2015 30/09/2016 31/12/2015

total assets 7,256.8 7,063.4 18,913.8 18,243.3 9,845.5 9,426.3loans and advances to clients after loan loss provisions 5,066.9 4,920.1 13,200.7 12,351.7 6,589.2 6,359.6primary funds 5,238.8 5,109.8 13,075.7 12,620.0 7,167.2 7,020.7

of which savings deposits 1,573.8 1,629.8 2,840.6 2,912.6 1,243.1 1,200.8 of which securitised debt including subordinated capital

756.8 758.1 2,147.9 2,098.5 1,496.0 1,377.9

equity 884.9 860.2 2,061.9 1,925.7 1,211.0 1,148.7managed deposits 13,413.5 13,212.1 26,018.6 25,245.1 13,107.6 12,732.4

of which customer deposits 8,174.7 8,102.3 12,942.9 12,625.1 5,940.4 5,711.6


imprint

Bank für tirol und Vorarlberg aktiengesellschaftStadtforum 16020 innsbruck

t +43 5 05 333-0F +43 5 05 333-1180SWiFt/BiC: BtVaat22BlZ: 16000dVr: 0018902Fn: 32.942wUid: atU 317 12 [email protected]

notesany reference in the interim report to a person (e.g. he, him) is intended to apply equally to women and men.

in the BtV interim report there may be slightly differing values between tables or graphics due to rounding differences.

this report contains forward-looking statements relating to the future performance of BtV. these statements reflect estimates which have been made on the basis of all information available to us on the reporting date. Should the assumptions underlying such forward-looking statements prove incorrect, or should risks materialise to an extent not anticipated, actual results may vary from those expected at present.

media owner (publisher)Bank für tirol und Vorarlberg aktiengesellschaftStadtforum 16020 innsbruck

Further details pursuant to Section 25 of the austrian media act can be found at www.btv.at/impressum.

principle objectivedisplay and presentation of the company and information about the key products and services of the Bank für tirol und Vorarlberg aktiengesellschaft.

ContentsBtV Finance and Controllingnicole margreiter, BSc.hanna meranerCarina Zieher, Ba hannes Gruber

designBtV marketing and Communicationmarkus Geets

Final version8 november 2016

shareholders’ report interim report as at 30/09/2016...6 btv interim report as of 30/09/2016 total...

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